Former MPC member calls for 150 bp rate cut

LONDON (Reuters) - A former Bank of England policymaker called for an interest rate cut of 150 basis points, the Daily Telegraph newspaper said.

Willem Buiter, a professor at the London School of Economics and former member of the Monetary Policy Committee (MPC), was quoted as saying he did not expect the committee to go that far when it announces its interest rate decision on Thursday.

"I would vote for a 150 basis points cut. I don't think they're going to do that but I think they're likely to do more than 50 basis points and possibly even 100," the newspaper said on its website on Wednesday.

The MPC, which slashed rates by 50 basis points to 4.50 percent on October 8 as part of an unprecedented global coordinated easing, has never cut interest rates by more than a half point since it was given policy independence in 1997.

The Bank of England is expected to cut rates by a half point on Thursday, but the chances of a bigger cut are nearly one in three, a Reuters poll showed on Wednesday.

Buiter, said interest rates could fall as low as 2 percent during the current cycle.

"I think interest rates will probably touch 2 percent before we're done. The only floor is zero. I don't think we'll quite see that but the economy is deteriorating very rapidly so I expect you'll see rates not much above where they are now in the US by the time we're done."

Economists polled by Reuters said the sudden urgency for an aggressive move from the Bank of England comes partly on the perception that the level of UK rates, at 4.50 percent, is too high compared with other main policy rates and needs to come down quickly.

(Reporting by Eric Onstad, editing by Richard Chang)